Airlines Feel Pinch Of Falling Business Traffic

President Scott Kirby said the number of leisure travelers remains strong, even though fare sales have pushed revenue down.

"The revenue environment does seem to have bottomed out, which means it isn't getting worse," he said. "But there also aren't yet clear signs that it's getting better."

He said fare sales have kept vacationers traveling, but there's been no sign of improvement from business travelers — who generally pay higher fares and are thus more profitable. For instance, he said passenger revenue per available seat mile has dropped 20 percent on the US Airways Shuttle between Boston, New York, and Washington.

That route got more competitive on Thursday as JetBlue announced it will "aggressively defend" itself against growing competition from rivals by adding four daily nonstop flights from Boston's Logan Airport to Baltimore/Washington International Thurgood Marshall Airport (BWI) on Sept. 9. Dallas-based Southwest Airlines Co. last week announced plans to start flying that route on Oct. 1.

Forest Hills, N.Y.-based JetBlue will offer fares starting at $39 — $10 cheaper than Southwest's lowest fare.

The move is a response to Southwest's growing presence at major Eastern airports, as well as encroachment from Virgin America.